EURO GOVT-Greek bond yield spread widens on weak GDP data

LONDON Feb 15 (Reuters) - The premium investors demand to hold Greek government debt rather than German Bunds rose on Tuesday after GDP data showed the country's recession deepened in the fourth quarter of 2010.

Greece's economy shrank at an annual 6.6 percent pace in the fourth quarter deteriorating further from a revised 5.7 percent slump in the previous quarter, flash Eurostat estimates showed. [ID:nLDE71E0VX] "It's a slightly delayed reaction to the GDP numbers that came out today," a trader said. "Maybe some market participants imagined the ECB would step in and when they didn't turn up some people lost heart and started selling it down."

The Greek/German 10-year bond yield GR10YT=TWEB DE10YT=TWEB spread widened by 26 bps to 860 bps as the outright Greek yield climbed to 11.93 percent.

(Reporting by William James)